MGM Resorts International‘s presentation last week to the Maryland Video Lottery Terminal Location Commission lacked the smell of fear that Penn National Gaming exuded last week. Alluding to Penn’s offer to forfeit all profits and to creative accounting, MGM CEO Jim Murren called it “a very clever headline. But I spent too much time on Wall Street to be snookered by that one.”
His jibe drew laughs from the commissioners, which doesn’t bode particularly well for Penn’s chances, even if MGM’s proposed design looks like an avant-garde aircraft carrier. (With revenues at Penn’s Charles Town racino in a tailspin, how competitive — never mind profitable — do you think Rosecroft Raceway will try to be?)
In a display of confidence, Murren proffered no extra goodies. (Rival Greenwood Racing not only promised $100 million in highway 
improvements it offered to pay the highest tax rate in the state: 67%.) MGM’s proposed level of investment — $925 million — is the largest on the table and the company would build the greatest number of hotel rooms. After seeing Penn and — to a lesser extent — Greenwood get down on their knees and beg for a license, Murren’s appearance brought some overdue decorum to this subservient ritual. Saying, “We’ll pay 67%,” is equivalent to cooing, “Spank me harder, big boy” and then trying to find sympathy later on when you complain that you’re overtaxed.
The decision will come down, however, to “the highest potential benefit and highest prospective total revenues.” That favors those who are throwing around the biggest tax numbers. Greenwood Racing projects that it can generate $812 million-$1 billion of revenue in the third year. Experience leads one to put more credence in MGM’s $650 million projection for the same time frame. That’s slightly more than what Maryland Live! is doing right now — and it’s been open 17 months and had table games only for the last six of those months.
A poll bought by Internet gambling opponent Sheldon Adelson finds that 62% of Americans oppose Internet gambling … just like Sheldon Adelson. Isn’t that surprising? The real surprise would have been if the numbers had come out less favorably and Las Vegas Sands had published them anyway.
